The Japanese finance minister, Shoichi Nakagawa, offered his resignation today, after slurring and yawning his way through a press conference at the G7 meeting in Rome at the weekend.

Nakagawa – who is known to enjoy a drink – denied he was drunk when he addressed the Japanese press on Saturday. He instead blamed his bumbling and at times incomprehensible performance on an overdose of cold medicine.

Despite his denials, those who have seen footage of the press conference, repeated all day on Japanese TV, agree he had the glassy eyes and sweaty complexion of a man who had enjoyed a few glasses of Chianti too many courtesy of his Italian hosts.

"It is true that I didn't conduct myself properly, and I feel I must set the record straight," the 55-year-old Nakagawa told reporters in Tokyo.

He admitted drinking on the flight from Tokyo to Rome on Friday, but insisted he had no more than a sip of wine at an official lunch the following day.

"I did not drink a glassful," he said. "I had a cold. Honestly, the cold medicine kicked in too much," he added, before sniffing loudly to prove his point.

Early today, Nakagawa, announced he would step down because of health problems but said he will stay on until parliament approves a supplementary budget, probably in April.

"I apologise for causing such a big fuss," Nakagawa said. "I plan to submit a formal resignation as soon the budget and related legislation are passed by the lower house."

Failure to act could have irreparably harmed Prime Minister Taro Aso, who is battling record low poll ratings and must call an election by the autumn.

Opposition leaders had also called for ­Nakagawa's immediate dismissal. "It is embarrassing," Yukio Hatoyama, the secretary general of the Democratic party of Japan, said.

"This has sent the wrong message to the entire world, and he should be sacked immediately. He has damaged the national interest."

Nakagawa's appearance in Rome was punctuated by long pauses, garbled sentences and an apparently overwhelming desire for 40 winks.

"The G7 meetings ... which were officially held today ... started last night," he told bemused members of the Japanese press corps.

"Something like a joint statement was issued," he added, before making a mess of a question about monetary policy that had been directed at a visibly dismayed Bank of Japan governor, Masaaki Shirakawa.

"Interest rates, er, set by the Bank of Japan, are going up from zero to 0.25%," he said. In fact, the bank lowered rates to 0.1% in December.

Reports said Nakagawa had nodded off during a conference with G7 colleagues and appeared well refreshed during talks with the Russian finance minister, Alexei Kudrin.

The chief cabinet secretary, Takeo Kawamura, insisted Nakagawa had not been drunk. "He told me he had caught a cold because of his busy schedule ahead of the G7 meeting, so I told him to take better care of himself," he said.

But other Liberal Democratic party colleagues hinted that the hapless finance minister had been under the influence of more than cold medicine.

"He loves to drink, so I once told him to be careful about his drinking," Yoshio Mori, a former prime minister, said in a TV interview.

In Nagatacho, the heart of Japanese political power, tales abound of Nakagawa's capacity for alcohol.

He was criticised for being drunk during the 2000 election campaign, and derided for talking about "expenditure" when he meant "revenue" in an address to parliament last month.

His conduct at the G7 meeting could not have come at a worse time for Aso, whose poor handling of the economic crisis has seen his personal approval ratings sink to below 10%.

The size of the task facing Japan was underlined today when new figures showed its economy had shrunk at the fastest rate since the 1974 oil shock and was heading for its deepest recession since the end of the war.